6 May 2016

Ivory Coast May Sell Stake in Orange Phone Unit on Local Bourse

Ivory Coast is considering the sale of its minority stake in the local unit of French wireless operator Orange SA on the regional stock exchange. That would add the West African nation’s telecommunications industry to a privatization program that already covers industries such as banking and agribusiness.

“It’s something that’s being considered,” Bruno Kone, Ivory Coast’s minister of digital economy and postal services, said in a phone interview on Wednesday. “There’s no pressure. The state will appreciate the right time to sell on the bourse.”

Ivory Coast’s government and Paris-based Orange have agreed to merge the country’s land-line operator Côte d’Ivoire Telecom — currently 49 percent owned by Ivory Coast and 51 percent by Orange — with Orange Côte d’Ivoire, which provides mobile and Internet services. The combination, scheduled to be completed next month, will leave the government with a 15 percent shareholding, which it could then decide to sell.

A disposal of that stake would come as part of a privatization program by the world’s biggest cocoa producer, started by President Alassane Ouattara in 2013 to boost public finances and make companies more efficient and competitive. Last month, the government hired Rothschild & Cie to advise on the privatization of small-business focused Versus Bank, and is also trying to sell a stake in Industrial Promotion Services (West Africa), which operates in industries such as packaging and agribusiness. It’s also sold shares in Societe Ivoirienne de Banque SA, or SIB, to Moroccan lender Attijariwafa Bank.

The phone-company stake would be sold on the Bourse Regionale des Valeurs Mobilieres, which is based in Ivory Coast’s commercial capital, Abidjan, and trades securities from eight West African nations.

The merged phone company will probably be named Orange Côte d’Ivoire and will be the country’s biggest phone operator with more than 11 million mobile and landline subscribers and 3.8 million Internet users, the government said. The country’s population was about 23 million at the end of 2015, according to an estimate by the U.S. Census Bureau.

Orange will use the Ivory Coast unit as a regional hub to invest and make acquisitions in West Africa, Bruno Mettling, the country’s deputy chief executive officer of operations in Africa and Middle East, said last week. Orange completed the purchase of Liberia wireless company Cellcom last month and in January agreed to acquire Bharti Airtel Ltd.’s units in Burkina Faso and Sierra Leone as part of an expansion on the continent.

Ivory Coast has previously considered selling its shares in Côte d’Ivoire Telecom on the Abidjan-based stock exchange, according to Kone, but the plan was abandoned due to the lack of growth prospects for landline-only operators amid rising demand for smartphones. The business was on a 2013 list of 15 companies that the government considered a candidate for full or partial privatization.

“The state has no vocation to remain a shareholder in a private operator for a long time,” Kone said. Source: Bloomberg